US-based ratings agency Fitch Ratings said it believes that the global reinsurance industry’s strong capitalization can absorb material expected losses from Hurricane Sandy, based on preliminary assessments.
The firm said it also does not anticipate substantive negative rating actions on a broad cross section of global reinsurers as a result of the devastating storm.
However, due to the scale and complexity of the event, the ultimate level of insured losses remains highly uncertain. As such, Fitch said it will continue to monitor developments related to Sandy for any potential rating implications to reinsurers.
Insured industry losses from Hurricane Sandy are estimated by catastrophe modeler EQECAT, Inc. to be in the range of USD 10bn to USD 20bn, said Fitch. This is somewhat higher than AIR Worldwide’s estimated insured industry loss to onshore U.S. property exposures of near USD 10bn, with a likely uncertainty interval of USD 7bn to USD 15bn.
However, catastrophe modeler Risk Management Solutions has thus far refrained from providing an industry loss estimate, stating that the still developing information on the event, and its unique nature, would make any estimate at this time potentially unreliable.
Early estimates of hurricane losses are often revised upward as more information becomes available, Fitch said.